If you believe your client should consider life or critical illness insurance for a child, broaching the subject can be a challenge. Rather than introducing the topic by talking about death and serious illness, make it a positive conversation about protecting the family.
Think of insurance for children as an extension of a parent’s life and health insurance needs, says Laurel Pedersen, assistant vice president, individual health insurance product development with Toronto-based Sun Life Financial Inc. Position the products as a way to get coverage for the whole family, she says: “You want to take a ‘family target’ approach, and talk about how life and health insurance for children fit into that picture.”
There are several “sweet spots” when it comes to determining which clients would be most receptive to youth coverage. The first is when your client is a part of a couple in which one partner is uninsurable.
“If one of the parents is not insurable,” Pedersen says, “adding a child rider provides the family with that much more flexibility in their life and health insurance coverage.”
In such cases, clients become more open to the possibility of insuring their children, says Nathalie Tremblay, health products manager, individual insurance, with Lévis, Que.-based Desjardins Financial Security. “Parents do not want their kids to become uninsurable as adults.”
Another sweet spot for talking about insurance for children is having a client who has received insurance as a gift from his or her own parents or grandparents. Says Tremblay: “[Such a] client will be happy to do the same for his or her child.”
If your client has grandchildren, a child’s policy is an opportunity to get the children something they don’t already own.
Also, some companies, such as Sun Life, offer a return-of-premium option on children’s products: if the insured child does not get sick, the parents can receive some — in certain cases, all — of the premiums back when the child reaches the age of majority. This can be helpful for paying for post-secondary tuition or other expenses.
Parents with CI coverage for their children have choices when it comes to treatment or other ways to spend the money, such as on a family trip after treatment.
Finally, for advisors who want to show that they are not exploiting children’s misfortune by selling insurance for children, Moshe Milevsky, associate professor of finance at York University’s Schulich School of Business, suggests donating the commissions made from the sale of children’s products to charity.
“With controversial products such as these,” Milevsky says, “it’s best to remove the bias and take the profit motive out of the equation.”
-Olivia Glauberzon